Purchasers warned of technological 'perfect storm'

Will Green is news editor of Supply Management
12 October 2015

Buyers have been warned of a “perfect storm” of technological disruption that will force change in the profession.

Thijs Stalenhoef, senior director of enterprise products at Tradeshift, said the effect of technology on procurement over the next 10 years would be unlike its previous impact, which had essentially cut transaction costs by “3 to 5 per cent a year”.

Speaking at the CIPS Annual Conference in London, Stalenhoef said: “We have had 10 good years of IT. It has led to traditional thinking: 3 to 5 per cent optimisation a year. Cutting transaction costs has been the mainstay of IT for quite a while.”

However, he said innovations including increased processing power, robotics and driverless vehicles had created “a perfect storm of technological disruption in supply chains and services and changes in customer demand”.

Stalenhoef said firms such as Uber meant teenagers in the US no longer put a car at the top of their wish list. “For teenagers in the US the thing they most want is no longer a car,” he said. “That has been the thing since the 1950s.”

He gave the example of Blockbuster as a firm that failed to innovate and went bust as a result. “Blockbuster had the chance to buy Netflix for $50 million,” he said.

Stalenhoef said technology had the potential to provide more innovative solutions for buyers. “You are going to be able to work with your supply chain on much more innovative solutions, but as procurement professionals we’re all going to have to change,” he said.

David Noble, group CEO, CIPS, told the conference procurement was “in the top quartile of professions that could be wiped out by artificial intelligence”.

“Data management, analytics is a lot of what we do. Has it got a future when intelligent data and artificial intelligence can take that from us?” he said. “It is unsettling to hear people saying your profession is wide open to artificial intelligence, to say your job is now redundant.

“We have to take this warning seriously. It means a shift in where our profession needs to be and should be to add value toward the top end. It means being more strategic, about relationship management – which we do have a core skill in and should develop – but it is a warning, not just for us but for every profession, for the future.”

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